China Vanke, the country’s largest property developer by revenue, has tapped the dim sum market for the second time in two weeks, raising Rmb1 billion through the sale of 3-year notes at 4.05%.
Vanke, which recorded contracted sales of Rmb145.8 billion in the first 10 months, a year-on-year rise of 33%, has attracted decent demand to the transaction. The book was 3 times covered by orders from 89 accounts.
The debt issue was distributed 68% to Hong Kong, 26% to Singapore, 2% to the rest Asian and 4% to Europe. Fund managers took 67% of the deal, private bank clients bought 21%, banks got 7%, insurance 4% and others took the rest.
The coupon was set at 4.05%, 15bp tighter than the guidance of 4.25% at deal launch. The dim sum issue has saved the issuer 60bp-70bp in costs compared to an issue in US dollars, according to one source. The notes were trading at 30bp-40bp above par on Tuesday morning, said the source.
Vanke is a repeat issuer in the offshore bond markets, with this being the second time the developer has tapped the dim sum market this year.
On November 27, the company raised Rmb1 billion through the issue of 5-year notes at 4.5%. The deal attracted demand of Rmb2.5 billion from 69 investors.
“The issuer is riding on the recent hefty sentiment to renminbi bonds,” said another source.
In November, 11 issuers hit the renminbi bond market, raising a monthly record $3.2 billion, according to Dealogic data. Far East Horizon and Vanke came back to the dim sum market this month.
“The mid-year drought of dim sum bonds leaves investors with few choices so that the market welcomes such issues,” said the first source.
China Vanke has a rating of Baa2/BBB+/BBB+ (Moody's/S&P/Fitch), while the notes – which mature on December 16, 2016 – are expected to be rated at Baa3/BBB/BBB+ (Moody's/S&P/Fitch). Proceeds will be used for general corporate purposes.
BNP Paribas, Deutsche Bank and HSBC were joint bookrunners on the second issue of Vanke.